EU and IMF have power of approval over Ireland's four-year plan

The EU and IMF are entitled to seek whatever changes they see fit to yesterday's four-year austerity plan according to the Irish Times. The Department of Finance confirmed that Fianna Fail's austerity plans could be ammended by the two external bodies.

The document was drafted by the Government, but it is believed that neither the IMF or European Commission have endorsed it yet.

Despite this yesterday, Economics Commissioner Olli Rehn yesterday welcomed the plan saying it is "a sound basis for negotiations" on an emergency loan with the IMF and the EU.

The main points unveiled in yesterday's plan, as outlined by the Irish Times are as follows:

€15bn in measures aim to bring deficit under 3% GDP by 2014

€6bn of adjustments to be front-loaded in 2011

An extra €1.9bn sought via income tax changes

Standard VAT rate to rise from 21% to 23% in 2014

Entry point for income tax to fall to €15,300 – from €18,300 currently – by 2014

Minimum wage to be reduced by €1 to €7.65

Reduction of social welfare spending of €2.8bn targeted

Domestic water charges to be introduced by 2014

Introduction of a site value tax in 2012

Students' contribution charge to rise from €1,500 to €2,000

Reform of capital acquisitions, capital gains tax

Pension-related tax changes to yield €700m

Tax savings of €240m on public sector pension deductions

Site valuation tax to be introduced

Cut in public service staff by 24,750 from end-2008 levels to 2005 levels